But I see stability. I think maybe what you’re really driving at is, are we seeing any problems with it? For me, I see more stability. I see our ability on both sides of the business be able to extract the value that we expect for services that we provide.
Scott Schneeberger: Great. Thanks.
Operator: Thank you. And one moment for our next question. And our next question comes from Tobey Sommer from Truist Securities. Your line is now open.
Jasper Bibb: Hey, good morning. This is Jasper Bibb on for Tobey. For the US regulated waste business, I’m just curious if you could stratify the growth trends you’re seeing between the large and small quantity generators as well as what competitive behavior looks like on price from some of the smaller players in the market? Thanks.
Cindy Miller: Yes. Good question. I think for us that large quantity generator is really our — we call it our hospital group, if you will. Some of these hospital networks have grown quite large. I think when you take a look at growth, there are — it really is very interesting. We’re pleased with what we’re seeing in terms of volume — looks like it’s returning. I think more to come as the year unfolds. We’re encouraged by what we’re seeing. It is mixed in terms of that recovery, though, certain areas, staffing has come back. And are in a little bit better shape than maybe some of the others. But for us, we’re very encouraged by what we see in terms of the opportunity to grow there.
Jasper Bibb: Thanks. And then I know there’s typically a seasonal impact in the first half with tax season for Shred-it. So just kind of curious if you’ve seen the seasonal uplift there that you’d normally expect — and whether you’ve seen tonnage start to, I guess, stabilize a bit more as the return to office trend discontinued?
Cindy Miller: Yes, I think that’s a good call out. It is kind of a minor blip, not everybody as soon as they do their taxes purge everything from seven years prior. So it isn’t quite an apples-to-apples. The other thing I want to say with reference to Q1, we did see some — we did have some adverse weather in the beginning of — or through January, we had several facilities. We had the usual things with the issues with pipes bursting and vehicles not being able to get out. And as a result with us on the Shred-it business, that means transactions weren’t able to happen that day, which means we missed some revenue. So I think all-in-all, those things kind of washed as we moved through the quarter. So for us, as we move forward into Q2, I think that the ones that we do like about this business is it isn’t really extreme cycles or seasonality to it.
So I think we’re encouraged where we are, which is why we believe we’re going to continue to make guidance as originally outlined.
Jasper Bibb: Makes sense. Thanks for taking the questions.
Cindy Miller: Thanks, Tobey. Thanks, Jas.
Operator: Thank you. And one moment for our next question. And our next question comes from Michael Hoffman from Stifel. Your line is now open.
Michael Hoffman: So, Cindy, congratulations on being noted as a woman who inspires by Waste360.
Cindy Miller: Michael, thank you very much. That was a very kind little public service announcement.
Michael Hoffman: So my questions are around growth first. In medical waste, I think, of you as having kind of in the low 30s penetration in the small — what used to be called small generator, your independent market. Cory talked about a go-to-market strategy on the fourth quarter call so there’s why can’t you get the next incremental dock. But in volume part of the market. Mike said is you’re a little underweighted relative to your hospitals in assisted living and nursing homes. So isn’t that and also golden opportunity even as we are waiting for the staffing volume recovery issue and the existing base. There’s a new customer add opportunity as well?
Cindy Miller: Michael, it’s almost as if you’ve been in a couple of the rooms, we do talk about that. And one of the things that I think the ERP has done for us. And quite frankly, one of the things that a stable workforce. So we are staffed accordingly. And when you reroute and you rebalance routes and you take miles out of drivers days. It provides them an opportunity within their territory and to be more productive as you drive density within that days’ worth of work. So for us, when you have the opportunity to do more than just drive across town, drive to the next county and worry about time commitments for big customers or bigger customers. When you tighten up your routes, you afforded the opportunity to look left and right and go after different leads and go after different opportunities, because you do have appropriate staffing now to be able to provide the service that all of those customers expect.
And as you can imagine, when you’re dispatching looks more like a bowl of spaghetti, sometimes it’s very difficult to add — to look for something else in order to capture and gain that revenue. So as we continue to rebalance and we continue to really get, I think, pretty efficient. I’m pretty proud of this team, having lived in the world of efficiency for 30 years before getting here. I would stack the ability that our people and the learnings that they’re getting with this new technology, I’d stack it up against many. And for us, as we do that, you’re right, that’s where operations improvements and engineering improvements come to the table and share with commercial that, hey, we have the opportunity to do more and be more and then we can get more aggressive in those avenues.
So I think you’re only as good as the service you provide, as we get tighter and we get better with our routes, you can then open up the service to more. And I think that’s finally a position where we putting ourselves in as we move forward.
Michael Hoffman: Okay. And then on the Shred-it side, Janet, could you disaggregate for us or help us, if we strip away SOP, and we strip away the CVS and Rite Aid site facility closures, where same-store otherwise stops up, so we’re seeing organic growth.
Janet Zelenka: Yes. So if you take away what’s going on with the national footprint and good to call out, we’re seeing encouraging signs on the rest of the small medium business. And what’s going on there. And really it’s a really commodity issue as well as you all know. And if you strip out globally, all the commodity-based revenue, just look at service revenue was up about 3% globally and about 2.9% North America.
Michael Hoffman: Terrific. And then just so we don’t get your top line wrong. If you gave — if you knew if the current SOP price was the price for the whole quarter, what’s our headwind year-over-year?
Janet Zelenka: Yes. So significant headwind for the year. I think we’re looking at — I’m trying to get the number right here. It’s like 18 million or something like it’s a big number. That was headwinds. Are you looking for the headwinds Q1 over Q1?
Michael Hoffman: Well, you told us in 1Q, I have that data because you gave it to us, but there’s going to be another headwind, it’s supposed to be smaller in Q2.
Janet Zelenka: Right. If there is more in Q2. It’s less than what it was in Q1 significantly. If you just look at the paper pricing year-over-year, it starts to mitigate in the comparison. And then it ceases to be a headwind in the second half of the year.
Michael Hoffman: So $10 million?
Janet Zelenka: Yes. It’s actually in the — around the $5 million range is our best guess for the second quarter of what we see year-over-year, and then it gets to be a nonissue in the second half of the year.
Michael Hoffman: Right. And then squeeze one last one. Cindy, about a couple of years ago, I asked you this question about, could you go from transaction base to service base. So now I understand why you were so enthusiastic because it was going to be in the ERP. Five years out, what do you think the mix looks like?
Cindy Miller: Yes. I think just as Janet had mentioned, if you take a look in our best bellwether is Steri-Safe on the regulated side. We’ve got a large customer base in terms of independent, which would be the equivalent to the small and medium businesses on the Shred-it side. So for us, if you take a look at about 90% of that independent is in that subscription base. I think for us it at least put a target out there for us to work towards — so I don’t know exactly what it will be, but I know what it turned into and what we’ve matured on the regulated side. So I think we’ve challenged ourselves internally that we know what’s possible. And certainly, different businesses, different needs. But for us, we think there’s great upside there, and that’s what we’re going to continue to work towards.
Michael Hoffman: All right. Thanks and congratulations again.
Cindy Miller: Thank you.
Janet Zelenka: Thank you.
Operator: Thank you. [Operator Instructions] And one moment for our next question. And our next question comes from Kevin Steinke from Barrington Research Associates. Your line is now open.
Kevin Steinke: Thank you. So just again following up on the ProtectPLUS offering. You mentioned the 2 million contribution from new customers only. Does that imply that you have not yet begun to cross-sell it to existing customers, which presumably is a large opportunity for penetration. As you referenced there with the high levels of Steri-Safe penetration that you’ve achieved?
Cory White: That’s exactly right, Kevin. It’s been focused on new customers only. We expect more opportunity to manifest as we go throughout the year, but we’ve started with only new contracts.
Kevin Steinke: Okay. Do you have a sense as that timing is when you might start to ramp up the cross-sell for ProtectPLUS to existing customers?
Cory White: Yes. That will, obviously, over the course of the next few years, as contracts come up, we’ll have the opportunity to write them on the new ProtectPLUS offering. And so it will continue to trickle throughout the rest of this year and in the years to come.
Kevin Steinke: Okay. Understood. Thank you for taking the questions.
Cindy Miller: Thanks, Kevin.
Operator: Thank you. And I’m showing no further questions. I would now like to turn the back over to Cindy Miller for closing remarks.
Cindy Miller: Thank you, Justin, and to everyone listening on this call, we appreciate your interest in Stericycle and your shared excitement for our future. Thank you all very much.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
